US firms turn to India as visa caps bite

San Francisco: T.J. Rodgers, chief executive of Cypress Semiconductor Corp., had a simple solution to the hassles of getting visas for foreign engineers he needed to run his $1 billion (Rs4.3 crore) business.

“When I hire an Indian PhD today, I hire him in Bangalore, not San Jose. Now I can hire all I want and not have to worry about the vagaries of government decrees,” Rodgers said.

“They’ve made it less tenable to do business here, so we do business elsewhere,” Rodgers told Reuters in an interview.

News this week that the U.S. immigration service hit its annual quota for skilled worker visas in one day highlighted what Rodgers and other executives said is the need for reform of a system overwhelmed by New Economy hiring demands.

On Monday, the first day people could apply for the next round of H-1B visas that allow skilled foreigners to work in the United States, authorities were flooded with a record number of applications — more than 150,000.

The government plans to grant 65,000 H-1B visas to those who hold the equivalent of an undergraduate degree and have expertise in a specialized field. Another 20,000 visas will go to people with advanced degrees.

Executives say the chronic shortage of American engineers, programmers and scientists is forcing many companies to expand overseas, while also squeezing smaller companies that do not have the money for such expansion.

“The problem, obviously, is that not every company has that ability to relocate people overseas,” said Robert Hoffman, vice president of government affairs for business software maker Oracle Corp.

“A lot of small companies rely on H-1Bs. A lot of companies were started by those who were here on H-1Bs,” said Hoffman, who is also co-chair of Compete America, an industry group that advocates easier rules on foreign workers.

There are also those on the other side of the fence who say the current system is not strict enough and that fewer foreign workers should be allowed in because they are taking jobs away from qualified U.S. citizens.

“The problem is that there are not enough skilled workers at ten to twenty thousand dollars below the market rate. That’s the reason why these companies love these visas,” said John Miano, founder of The Programmers Guild.

Guild president Kim Berry added by e-mail: “The fact that the cap was reached in one day indicates how important a cap is. The software job market is flat, and has been so for many years. If there were no cap, people would flood in until we were reduced to begging for day programming work.”

Companies such as Microsoft Corp., the world’s biggest software maker, counter that they often pay more to hire foreign workers since legal fees can run well over $10,000 per person.

“If we’re not able to hire these people, it puts increasing pressure on us and other companies to do that work abroad. It has the perverse impact of encouraging off-shoring,” said Jack Krumholtz, head of Microsoft’s Washington, D.C. office.

Last month, Microsoft Chairman Bill Gates urged Congress to find ways to keep foreign students in the United States and help speed skilled foreigners obtain permanent residency.

“I see the negative effects of these policies every day at Microsoft,” Gates said.

Navneet Chugh, an attorney with The Chugh Firm, a Los Angeles-based law firm representing about 50 Indian companies doing business in the United States, said the visa limits meant American companies will increasingly turn to off-shoring.

“The IT environment in the United States and the IT manpower in India are two balloons tied to each other. When one is squeezed the air goes to the other. When the U.S. is unable to import software engineers, more work will go to India,” Chugh added.